October 21, 2004
Socially Responsible Investment Assets On the Up and Up Down Under
by William Baue

The Ethical Investment Association in Australia reports that SRI assets have doubled in the three
years it has been producing benchmarking surveys.

The Australian Ethical Investment Association (EIA), the socially responsible investment (SRI) organization that
lobbied for landmark SRI disclosure laws for all investments in the country, issued its
fourth annual SRI benchmarking survey last week. The report conservatively tallies total SRI
assets at $21.5 billion as of June 30, 2004, an increase of 96 percent since the inaugural SRI benchmarking survey
in 2001.

The most dramatic growth occurred in charitable trusts using SRI
criteria. They increased to $327 million, a 48 percent gain since last year and a 6,400 percent
rise since 2001, according to information provided by Philanthropy Australia. Assets in SRI managed funds,
which numbered $3.3 billion, increased by 41 percent since last year. That is a 1020 percent gain
since June 2000, according to data provided by Rainmaker Information.

"The spectacular growth
of socially responsible managed funds in Australia is very recent," stated Deni Greene, author of
the report. "Ethical/SRI managed funds represent only a tiny fraction of the overall funds
management market."

"Nevertheless, their rate of growth is significantly faster than the
overall market."

Assets in the overall Australian market rose by only 18 percent over the
past year, less than half the growth rate for SRI managed funds. The number of SRI managed funds
has also experienced a steep growth curve, climbing from 10 in 1996 to 46 in 2001 to 89 now,
according to the latest issue of Ethical Investor magazine.

The bulk of Australian SRI assets reside in investments by religious
organizations and employer superannuation funds using SRI overlays, which both number $7.2 billion
now. Superannuation schemes also direct investments into SRI managed funds, which are counted in
that category. The superannuation overlay category refers to investments that are not screened but
rather practice shareowner action by meeting with companies to discuss ways of overcoming or
reducing social and environmental risks.

The report also identifies $3 billion in assets
held by firms conducting shareowner action by filing shareowner resolutions.

"The most
significant shareholder actions this year were sponsored by the Wilderness Society [which] backed a resolution to the
Commonwealth Bank [ticker: CBA] calling on the banks to cease
investing in or loaning to companies damaging old growth forests [namely] the woodchipping company,
Gunns Ltd.," the report states. "The Commonwealth Bank resolution won nearly 25 percent of the
votes cast--93 million shares out of a total share pool of 377 million--at the October 2003 [annual
general meeting]."

"This vote was even larger than the 23 percent gained in an earlier
resolution sponsored by the Wilderness Society, which was described at the time as 'the largest
support for a shareholder resolution in Australia’s corporate history,'" the report
continues.

EIA took a rather conservative approach toward measuring shareowner action,
choosing to count only social and environmental resolutions, not corporate governance resolutions.
However, the dovetailing of corporate governance concerns with sustainability concerns may prompt
EIA to add corporate governance resolutions to future tallies.

With regard to managed
funds, EIA included only those funds that describe themselves as ethical, socially responsible or
sustainable. This is a decidedly more conservative approach to overall calculations of SRI assets
compared to the methodology employed by the Social Investment Forum (SIF) in the US.

"The US analysis included any
fund that uses one or more screens in selecting its investments," the report states. "In the US,
therefore, any fund that specifically excludes tobacco, for example, but includes no other SRI
criteria, would qualify for inclusion in the estimates of socially responsible investment."

SIF's 2003 Trends
Report identifies $2.16 trillion in overall SRI assets in the US, with $151 billion of that in
SRI mutual funds.

The report includes two more areas of SRI assets in Australia: $168
million in private SRI portfolios managed by financial advisers (up 32 percent since last year and
113 percent since 2001); and $322 million in community investment (up 69 percent since last year
and 148 percent since 2001).

Finally, the report includes the first ever quantification of
SRI assets in New Zealand: $19.28 million in four firms--Prometheus ($7.9 million), Tower ($8.18 million), AMP ($1.7 million), and Asteron ($1.5 million). SRI will undoubtedly
be on the rise in New Zealand in the future, as new legislation requires "ethical investment,
including policies, standards, or procedures for avoiding prejudice to New Zealand's reputation as
a responsible member of the world community." The recently-appointed Guardian of the New Zealand
Superannuation Fund, Glen Saunders, is an SRI expert, according to the report.